Electric push needs bigger boost

Automakers on board but sales short of targets

By Jameson Berkow, Financial Post

Originally published: April 13, 2012

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‘Electrified’ does not accurately describe the pace at which Canadians are embracing battery-powered autos, though the movement is starting to gather steam.

Automakers and consumers are beginning to get on board the proverbial electric car train, raising hopes in Canada’s nascent electric auto industry that the long-promised era of emission-free electronic-based transportation may have finally arrived.

“We were just about to give up,” Nathan Armstrong, founding chief executive of Motive Industries Inc., said in a recent interview. “But I think there is movement now.”

His Calgary-based company has spent about $5-million over the past two years as a key member of Project Eve, a consortium of more than two dozen Canadian companies banded together to produce electric cars on a scale intended to be competitive with major auto manufacturers in the United States. However, the project’s participants have yet to produce a single electric car.

Regulations prohibit them from selling their collective wares directly to consumers, Mr. Armstrong said, and interest among governments has never moved beyond rhetoric.

Calgary city officials were very interested in acquiring a locally made all-electric vehicle fleet when Mr. Armstrong proposed the idea.

“Then when it came time to actually place an order, because it was over $5,000 it had to go into the government procurement website for Canada so we put in our bid along with Ford and Mitsubishi,” he said. “They eventually picked Mitsubishi because it was $10,000 cheaper than our car would cost.”

Later, a deal to supply more than 100 fleet vehicles to 12 municipalities in Ontario’s Niagara region also fell through “because of a couple guys sitting in a budget office,” Mr. Armstrong said.

Such has been the issue preventing mass electric vehicle adoption since they were introduced more than a century ago and which still persists today, even in the face of record-high gasoline prices. Despite recent advances, electric vehicles are not expected to account for more than 15% of cars on North American roads until at least 2015, says a recent KPMG study.

“When we look at the die out of the golden years of the electric vehicle around 1904, the real issues were not about the battery or the vehicle technology, it was about the fact that electricity was really expensive at the time and gasoline was a cheaper product,” says Darryl McMahon, president of the Electric Vehicle Council of Ottawa, who built his first electric car more than 30 years ago. “But right now it looks like we are pretty much at the breaking point in terms of price, especially given the current price of gasoline.”

Growing competition is driving prices down and pushing the issue to the forefront of public consciousness. Nissan brought its all-electric Leaf to Canada last fall, Mitsubishi quietly started selling the iMiEV in December and Ford is expected to begin selling an all-electric version of the Focus in Canada within a year.

“The sooner we could switch to electric the more we could save,” said Ricardo Borba.

The 45-year-old software engineer took delivery of the first Nissan Leaf to arrive in Canada last September and has been using it to commute to the Ottawa offices of International Business Machines Corp., where the company has set aside reserved spaces for electric car drivers to park and charge their vehicles.

“It is the equivalent of driving a regular car and paying 20¢ per litre in gas, it is that cheap. So especially for families with two cars, it is the perfect city car,” he said, adding his family uses the Leaf for 85% of their driving, with his wife’s Toyota Corolla accounting for the rest.

TACKLING ‘ELECTRIPHOBIA’

Other fears which often prevent car buyers from considering electric options include the limited range – at best, an electric car will travel about 150 kilometres on a single charge – and the challenge in finding a qualified service technician. Mr. Borba says maintenance has been easy and “the range is more than adequate for what you need, even in the winter when the range drops a bit,” he says, stressing he lives in a city famous for being among the coldest capitals in the world.

On Friday, Mitsubishi’s Canadian division unveiled the fictitious “Electriphobia Research Institute” at the 2012 Green Living Show in downtown Toronto. It is a tonguein-cheek marketing campaign designed to challenge com-mon misconceptions about electric cars or, as the “Institute” puts it, “the shocking new fear sweeping the nation.”

“Through the ‘Institute’ we want to prepare EV consumers for the experience of never again visiting a gas station, having a tailpipe or changing the oil,” Peter Renz, director of marketing for Mitsubishi Motor Sales of Canada, said in a release.

Persuading consumers to convert to electric cars is a step forward, yet serious practical challenges persist. Power may not be generated inside the cars themselves as internal-combustion engines do with gasoline, though the power needs to come from somewhere.

Hamid Zareipour, a professor of electrical engineering at the University of Calgary who specializes in electricity market economics, warns millions of electric cars nestling into their chargers each night could represent more demand than the strained power grids of the nation can handle.

“If we have a large percentage of Canadian households owning an electric car in the future, there will be a significant increase in both electric energy demand and in peak electric load,” he said. “Meeting the extra energy and peak demand [will] require more infrastructure at very high costs.”

With about 12.5 million households in Canada today, assuming 90% of them eventually own an electric car and 80% of them charge in the evenings, Prof. Zareipour estimates an additional 12,600 MW (megawatts) would be required to meet the demand. That is about equivalent to all the power generation capacity available today in Alberta, he said.

The demand would be massive, though still manageable so long as the country adopts what Prof. Zareipour describes as a “managed charging system” whereby charging times are co-ordinated to reduce peak demand.

“This basically means we need to carefully plan the transition to electric vehicles,” he said.

Therein lies the rub of the electric car revolution.

“There isn’t somebody at the top of the leadership pyramid saying, ‘This is where we’re going,’ ” said Motive’s Mr. Armstrong.

Four years ago, Ottawa commissioned an Electric Vehicle Technology Roadmap for Canada, which was presented to the Ministry of Natural Resources in September 2009. The report set a goal of 500,000 electric cars on the road by 2018, though with combined sales of hybrid and electric cars being fewer than 24,000 last year, that milestone appears to be moving further into the future.

“This road map must not be allowed to sit on a shelf and gather dust,” Mike Elwood, vice-president of Azure Dynamics Corp. and chairman of Electric Mobility Canada, wrote in the road map’s introduction.

“It must not be just another report that studies the opportunities and challenges of electric vehicles but does nothing practical to address them. It must not be the basis of just further discussion – it must be the basis for concrete and early actions.”